Fiction, like society, is capable of social progress.

Progress is quite a loaded word, and if you assume fiction will progress, then you are almost assuming your conclusion.

This isn't a completed project. Stopping the production of fiction in its tracks now would leave us with a corpus of stories that under- and misrepresents many groups, and this would become even more of a problem than it already is

Let's make 'progress' concrete. Perhaps progress means that 'the fiction produced every year will feature characters that will statistically ever more closely match current demographics in the United States'.

Why is fiction mirroring demographics important?

Think of science-fiction; should Accelerando feature a carefully balanced cast with a few African-American men & women, 3 or 4 Hispanics of various ethnicities & nationalities, and a number of South-East Asians and old sansei? How would it be improved by such mimicking?

Or think of regular fiction - When William Shakespeare was writing Othello, the number of blacks in England must've been a rounding error; would he have done better to reflect the 100% white composition of England and make Othello an Arab or just a regular white northern European? When David Foster Wallace wrote Infinite Jest, would it be somehow more just or better, and not just more "progressive", if he had randomly noted that Michael Pemulis was of Chinese descent?

Fiction has never mirrored society even crudely, not in racial composition of characters, socio-economic status, career, religious or philosophical beliefs, or any distinction that you would like to honor with the title 'group'. That's the whole point: it's fiction. Not real. To make it ever more accurate this way would be to turn it into journalism, or render it as pointless as Borges's 1:1 map from "Of Exactitude in Science".